EUR/USD looks firmer, advances to 4-month tops near 1.1470
- EUR/USD adds to Friday’s gains and tests 1.1465/70 on Monday.
- Investors’ attention remains on Brussels and the pandemic.
- German Producer Prices came in flat MoM and dropped 1.8% YoY.
The single currency has started the week on the positive footing and is lifting EUR/USD to the 1.1465/70 band, or new 4-month peaks.
EUR/USD looks to Brussels, risk trends
The upside momentum in EUR/USD remains unabated for the time being. Indeed, the pair is now advancing for the second session in a row and navigates fresh multi-month tops in the 1.1465/70 band.
Investors continue to look to the recovery in the euro region as the main catalyst of the price action in past weeks, while rising hopes of a deal in Brussels - where EU leaders continue to discuss the recovery fund - also collaborate with the upeat sentiment.
In the calendar, German Producer Prices came in flat on a monthly basis in June and contracted at an annualized 1.8%. Later in the session, ECB’s L. De Guindos and P.Lane are due to speak while EMU’s Current Account results is also expected.
What to look for around EUR
EUR/USD is slowly approaching the 2020 highs just below 1.15 the figure, always on the back of the persistent weakness surrounding the buck. As always, upbeat risk appetite trends continue to support the momentum around the euro in combination with the current recovery in the euro zone. In addition, firm hopes of a deal surrounding the recovery fund currently under debate in Brussels are also sustaining the momentum around the euro. On the broader view, the solid stance of the current account in the euro area is also supportive of a strong exchange rate.
EUR/USD levels to watch
At the moment, the pair is gaining 0.33% at 1.1463 and a breakout of \1.1495 (2020 high Mar.9) would target 1.1514 (high Jan.31 2019) en route to 1.1569 (2019 high Jan.10). On the flip side, immediate contention emerges at 1.1186 (61.8% Fibo of the 2017-2018 rally) seconded by 1.1168 (monthly low Jun.19) and finally 1.1147 (high Mar.27).